Clare Nuttall in Almaty -

Three Kyrgyz political parties have agreed to form a coalition government, ending over seven weeks of uncertainty following the October 10 parliamentary elections.

The ruling coalition will comprise the Social Democratic Party of Kyrgyzstan (SDPK), Ata-Meken and Respublika. Almazbek Atambayev, the leader of the SDKP and a close political ally of interim President Roza Otunbayeva, will become prime minister. Respublika's leader Omurbek Babanov is expected to be appointed as deputy PM under the agreement, while Omurbek Tekebayev, leader of Ata Meken, will become the new parliamentary speaker.

Kyrgyzstan's acting speaker of the parliament, Tashpolot Baltabaev, announced November 30 that the three parties are now drawing up a formal coalition agreement. "Our representatives will meet with representatives of SDPK and Respublica to discuss details," Baltabaev told the parliament. A parliament session, during which deputies will discuss the final structure of the government, will take place on December 2.

The other two parties to have gained parliamentary seats turned down offers to join a coalition with the SDPK. Ata Zhurt, which includes several former allies of ousted president Kurmanbek Bakiyev among its leadership, and Felix Kulov's Ar Namys will remain in opposition. Both parties are opposed to Kyrgyzstan's new constitution that was adopted in June, which stripped powers from the presidency to create Central Asia's first parliamentary democracy.

After Bakiyev's government was overthrown in April 2010, the opposition politicians who made up the country's interim government decided that the switch from a presidential to a parliamentary form of government would curb the abuse of presidential power. Bakiyev took office in March 2005 promising not to repeat the excesses of his predecessor Askar Akayev. However, during his five years in power his rule became increasingly corrupt and authoritarian.

Large sections of the population also turned on Bakiyev because of the nepotism associated with his regime, and in particular the power his younger son Maxim Bakiyev wielded in the country. In one US embassy cable recently made public by Wikileaks, US Ambassador to Kyrgyzstan Tatania Gfoeller reported in October 2008 that British businesspeople in Bishkek "chorused that nothing gets done in Kyrgyzstan if President Bakiyev's son Maxim does not get 'his cut'," and told diplomats that, "Before all you heard was Akayev's son's name; now it's Bakiyev's son's name."

Back to business

Since April, Kyrgyzstan's business community has been waiting for the stability of a new government. The power vacuum that has existed since the revolution has made it difficult for businesses to make decisions, with many investments being postponed. "A lot of companies are interested in Kyrgyzstan, but decided to wait for the result of the elections. They want to see what the situation will be with the government and - because this is an Asian market - which people they will have to deal with," Aman Tentiyev, managing partner of Bishkek-based Aiten Consulting, said in a recent interview with bne.

According to Tentiyev, a number of Chinese companies, mainly in the mining sector, are ready to invest "serious money" in Kyrgyzstan once a government has been formed. The Chinese government is also considering funding major projects including a new railway from Kyrgyzstan to Uzbekistan and construction of new power lines.

Kyrgyzstan has been largely stable since the inter-ethnic violence in the south in June. At least 400 people and possibly up to 2,000 were killed in Osh, Jalal-Abad and smaller towns when street fighting between Kyrgyz and Uzbek youths escalated into four days of deadly ethnic clashes. Up to 400,000 people, many of them ethnic Uzbeks, were displaced, and those who have returned to their homes are trying to rebuild their lives.

There have been several incidents in the last few days, which are believed to be an attempt to destabilise the country in advance of US Secretary of State Hillary Clinton's visit on December 2. On November 29, three suspected Islamist militants were shot dead in a police raid in Kyrgyzstan's southern capital Osh, and a fourth man blew himself up. Early on November 30, a bomb was detonated near Bishkek's palace of sports where the trials of over 20 people accused of taking part in the killings during the April revolution are taking place. Two policemen suffered minor injuries in the blast.

"Destabilisation is needed by those who oppose the new regime and those who do not support the goals and objectives of the new authorities," Kyrgyzstan's Security Council secretary, Marat Imankulov, told journalists.